Tropical storm Ernesto pummeled the Yucatan Peninsula Wednesday, downing trees and power lines as forecasters predicted it could pick up strength across Mexico's oil-rich Bay of Campeche.

The storm, which made landfall as a category one hurricane before being downgraded to a tropical storm, dumped heavy rain on the region, prompting fears of flash floods and mudslides.

The airport of Chetumal, a city of 151,000, reported minor damage. In Majahual, a small town with a growing tourism industry where Ernesto made landfall, businesses suffered some damage.

Power outages were reported in the walled city of Campeche, a world heritage site on the west coast of the Yucatan Peninsula facing the Gulf of Mexico, and authorities warned its 300,000 residents to be prepared to batten down.

The Bay of Campeche is the center of Mexico's vital offshore oil fields.

"Pemex said that it was canceling some training exercises at oil rigs, but otherwise all operations in the region were normal," energy analyst Addison Armstrong of Tradition Energy said.

The storm was packing maximum sustained winds of 75 kilometers (45 miles) per hour and was headed for the "extreme southern Bay of Campeche," the Miami, Florida-based National Hurricane Center said in its 1800 GMT advisory.

While Ernesto was predicted to weaken further as it moved over land "some restrengthening is expected after the center moves back over the Bay of Campeche tonight," it said.

"Hurricane conditions are possible ... Thursday," it added.

Ernesto -- the second hurricane of the Atlantic season -- made landfall late Tuesday near the town of Mahahual in Mexico's Quintana Roo state, the NHC said, citing radar data from Belize.

The Yucatan Peninsula is home to bustling holiday destinations such as the resort city of Cancun and the island of Cozumel, but authorities in Quintana Roo state said there were few tourists in the area where the storm hit.

Nevertheless, state tourism secretary Juan Carlos Gonzalez said more than 200 emergency shelters had been set up to accommodate more than 80,000 people if necessary.

Mexico's defense ministry said it had mobilized about 1,000 soldiers to remain on alert in the area.

Authorities in Mexico shifted the hurricane warning to the country's Gulf coast, with other areas now under a tropical storm warning, as Ernesto tore westward. Neighboring Belize discontinued its tropical storm warning from Belize City to the Mexican border.

The storm, which began drenching Caribbean countries last week, was expected to dump up to eight inches of rain (30 centimeters) on areas of Belize, Guatemala and Mexico, with up to 12 inches of rain in isolated areas. Honduras was also hit.

"These rains may produce life threatening flash floods and mudslides over higher terrain," the NHC added.

This is the fifth named storm in the Atlantic Ocean since the hurricane season began on June 1.

Chris, which strengthened to hurricane force on June 21, stayed far off land, and fizzled out up without causing any damage.

Forecasters warned that in the Pacific, tropical storm Gilma was "just below hurricane strength."

At 1500 GMT, it was located 1,075 kilometers (670 miles) southwest of the southern tip if Baja, California.